WSJ What’s News - Where the Middle East Conflict Leaves Trump’s Foreign Policy

Episode Date: June 13, 2025

P.M. Edition for June 13. Iran sends dozens of ballistic missiles to Israel in retaliation for Israel’s ongoing attacks against Iran’s nuclear program and military leadership. WSJ White House reporter Alex Leary discusses what the escalating conflict in the Middle East may mean for President Trump, who has long said that the U.S. should pull back from foreign entanglements. Plus, we hear from Journal investing columnist Spencer Jakab about how markets are reacting to the conflict. And merchants like Walmart and Amazon are exploring launching their own stablecoins. WSJ reporter AnnaMaria Andriotis talks about why, and what impact that could have on banks. Alex Ossola hosts. Israel-Iran conflict live blog Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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As Iran retaliates to Israel's airstrikes, is the Middle East conflict leading to a new oil crisis? Plus, how the attacks push President Trump into something he has long avoided. President Trump campaigned on saying he was going to be the peace president. Now for the first time he's got a real conflict that happened on his watch. So a lot of people will be watching to see how he proceeds and how he handles it. And companies like Walmart and Amazon are exploring launching their own stablecoins. It's Friday, June 13th. I'm Alex Osolele for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. We start this evening with developments in the Middle East, the ongoing strikes in Israel and Iran, where this leaves the US, and the impact on markets. First, we go to the situation in Israel, where central Tel Aviv was impacted by ballistic missiles from Iran. Israeli paramedics say they were treating five injured people. A US official said the US provided some air defense to Israel. Israeli Defense Minister Israel Katz said Iran had crossed a red line by firing missiles

at populated civilian areas in the country. A few hours ago, as those missile attacks were in progress, we spoke to WSJ reporter Dov Lieber on the ground in Israel. Over the past hour, we've seen a major escalation. Iran has sent three different salvos, each dozens of ballistic missiles, at Israel. That's at central Israel and northern Israel. I'm not so sure Israel has really ever experienced an attack like this.

We saw already that the first salvo that hit central Israel, some of those missiles penetrated Israel's air defenses and landed directly in the center of Tel Aviv. I'm sitting somewhere in northern Israel. I don't want to say exactly where, but I can also hear explosions over my head just a few minutes ago, maybe a dozen or 10 explosions right now. The salvos keep coming, the third in just one hour, and the whole country is basically camped out in bomb shuttles like myself right now. We are indefinitely camped out in our bomb shelter at this point in time. The Supreme Leader of Iran, Ayatollah Ali Khamenei, had said earlier that Israel should expect severe punishment for its wide-ranging strikes on the country's nuclear program and military leadership.

In waves of strikes that continued throughout the day, Israel killed the head of the Islamic Revolutionary Guard Corps and struck dozens of targets. Israeli Prime Minister Benjamin Netanyahu said the military operation would last as many days as it takes. A senior Israeli official said Israel planned 14 days of operations. In the U.S., Republican senators said they strongly supported Israel's decision, while some Democrats were more critical and said that the U.S. should have upheld its nuclear deal with Iran. Senate Minority Leader Chuck Schumer, who has been an outspoken critic of Netanyahu, said in a statement that the U.S. commitment to Israel's security and defense, quote,

must be ironclad. Meanwhile, President Trump urged Iran's leadership to make a deal, quote, before there is nothing left, saying Israel had access to lethal military equipment manufactured by the U.S. and that they know how to use it. WSJ reporter Meredith McGraw covers the White House and she spoke this morning to President Trump about the attacks. When I spoke with the president, he wanted to make clear that he felt that Israel's attack on Iran was, quote, very successful.

And then he immediately went into talking about the fact that he had put a 60 day ultimatum for Iran to reach some sort of nuclear agreement. And he said, quote, I told the other side, I said, you have 60 days to make a deal on the 61st day they attacked today is 61. And he also, I want to say sounded optimistic that they could potentially still make a deal, although there were some ominous undertones. The president had made clear, both publicly and privately, that he did not support Israel making an attack. But I wanted to know if he had been given any sort of heads up from the Israelis.

And he said, quote, it wasn't a heads up. It was we know what's going on. He wanted to make clear that, of course, the U.S. was aware of the situation. So where did the latest developments leave President Trump and American foreign policy? White House reporter Alex Leary is here to discuss. This puts President Trump and his administration in a very tough position. They had tried for months to negotiate a deal with Iran and it didn't materialize to the frustration of a lot of people, including a lot of Republicans on the Hill who wanted

to see the president take a more aggressive posture, align more with Israel. President Trump has long said that the U.S. should pull back from global entanglements. And yet with this conflict, it seems very possible that he could get pulled in, right? Right. That's the one big worry that the US gets drawn into this conflict, and it becomes something more like a war in the Middle East. President Trump campaigned on saying he was going to be the peace president. He said that the war in Ukraine would have never happened if he were in office, that

Hamas wouldn't have done its attacks on Israel. So he made a lot of major promises on the campaign and said that he was going to be the peace president and use peace through strength to achieve that. Now for the first time, he's got a real conflict that happened on his watch. So a lot of people will be watching to see how he proceeds and how he handles it. I'll also mention that this has created a real division among his political base, the MAGA base. A lot of his supporters really bought into the notion that the U.S. shouldn't be engaged internationally as much as it had been in the past. So there's a division between those folks

and those who are more traditional Republican conservatives on foreign policy and want to see a robust feeling that U.S. take the lead in fighting back. That was WSJ reporter Alex Leary. Thank you, Alex. My pleasure. You can follow the latest in this developing story on the live blog on wsj.com. We'll leave a link in the show notes. Stocks retreated today after Israel and Iran traded attacks.

Investors rushed to safe havens that they perceived to be less risky. Gold rose 1.5% to a new record and the dollar strengthened. Oil prices jumped with Brent crude futures rising 7%. The Sebo volatility index, known as the VIX or Wall Street's fear gauge, jumped signaling rising investor caution. Major US indexes closed lower. The S&P 500 fell about 1.1%, the NASDAQ dipped 1.3%, and the Dow dropped roughly 1.8%. To discuss the impact that the attacks have had on the markets, I'm joined by WSJ investing

columnist Spencer Jacob. So Spencer, as expected, markets are down, safe havens are up, oil is up. Where do things go from here? Could we expect another oil crisis like it's the 1970s again? Whenever you have scary headlines coming, particularly out of the Middle East, occasionally Venezuela and Russia, oil tends to spike. And Iran is a major crude producer more than three million barrels a day it exports more than one and a half million barrels a day so anything involving Iran involving military conflict obviously is going to

get the market excited but it's doubtful that this will turn into an oil crisis anything like the ones that we've seen in the past and nothing at all like the 1973 Arab oil embargo that's oil prices quickly quadruple. What kind of impact might rising oil prices have on inflation though? Oil is a part of everything we buy. It's part of the cost of transporting things. It's obviously a cost at the pump. It affects the price of air tickets, plastics, what have you.

But oil prices have not really jumped that much if you zoom out even slightly. We're flat for the year. Oil prices had been on a downward trend in part because of very high production. A spike of a few days or a few weeks really has a pretty fleeting effect on inflation. That was WSJ investing columnist Spencer Jacob. Thank you, Spencer. Thank you. Coming up, why companies like Walmart are interested in launching their own cryptocurrency. That's after the break.

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We're exclusively reporting that Walmart, Amazon, Expedia, and other multinational giants are exploring whether to issue their own stablecoins in the U.S. That's according to people familiar with the matter. For more, I'm joined by WSJ reporter Anna Maria Andriotis. Anna Maria, why are these companies looking to do this and why now? These large companies for many years on and off have been looking at a variety of alternative payment options to what essentially are the normal ways that they get paid. They look for other payment options, saving on the fees that they pay.

But right now, the reason why these large merchants are looking at stablecoin is because of a bill, the Genius Act, which is widely looked at as a law that would create the sort of foundational groundwork for stable coin to be able to actually take off in the U.S. as a mainstream currency. It seems like the big advantage for some of these companies would be that these corporate coins would save them money by taking payment activity away from the traditional financial system. What would that mean for banks then? The biggest risk to banks should stable

coins become a reality in consumer to merchant payments is that banks would lose out on a portion of the revenue they're already receiving. But it has to be stressed there have been so many attempts alone in the last decade or so to try to create a payment system that is outside of this very ingrained Visa, MasterCard, American Express type of payment system. Pretty much all of them have failed, but the opportunities for cost savings for merchants are big and the risk of losing significant revenue is certainly very much present and one could argue growing for the biggest banks as crypto, whether it's stablecoin or other forms of crypto, are increasingly being looked at as is this the future of how

people and merchants transact? That was WSJ reporter Anna Maria Andriotis. Thank you, Anna Maria. Thank you. [♪ in determining the cause of the tragedy that killed more than 260 people. Air accident investigations can last months and often point to a number of factors contributing to a crash, like possible crew missteps and maintenance errors. And finally, boasting tanks, cannons, soldiers, and fireworks, President Trump's military parade tomorrow is designed to be a spectacle. Opponents to Trump want their nationwide protests that day to

be an even bigger one. Progressive groups have organized protests in over 2,000 cities across the US. Dubbed No King's Day, the protests aim to reject what organizers say is Trump's overreach. Meanwhile, far-right groups are using social media to discuss responses, potentially violent, to the rallies against President Trump. Some extremist groups appear to be capitalizing on escalating emotions and at times destructive protests in LA as a recruitment opportunity or to promote the mass deportation of immigrants living in the US illegally. And that's What's News for this week.

Tomorrow you can look out for our weekly Markets Wrap-Up, What's News in Markets. Then on Sunday we'll be discussing how artificial intelligence is coming to the physical world and who stands to make big money on physical AI. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienamé with supervising producer Michael Cosmides. Michael Laval wrote our theme music. Aisha El-Muslim is our development producer. Scott Salloway and Chris Dinsley are our deputy editors.

And Philana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osela. Thanks for listening.